Top Tax- Saving Year-End Strategies for Charitable Giving
From the FIU Office of Development and Alumni Relations
As the holidays approach, many people look for ways of combining their desire to help FIU Business and other causes they believe in with their desire to save on taxes. Generally, if you itemize your deductions, making charitable contributions can decrease your tax bill, and since high‐income earners pay tax at higher rates, they may enjoy a particularly large tax benefit from charitable contributions. However, if you are among the estimated 90 percent of individuals who will not itemize because of the higher standard deduction implemented by the Tax Cuts and Jobs Act of 2017, there are several ways you may still realize tax savings from your gifts.
Here are some strategies to consider when planning for your year-end charitable gifts:
Give Long-Term Appreciated Securities, Rather than Cash
A gift of appreciated property such as securities or real estate is a popular alternative to a gift of cash and generates a double tax benefit. In addition to receiving a charitable tax deduction for its full fair-market value, you escape tax on the capital-gain element in the property. Learn more.
Over 70½? Consider a Qualified Charitable Distribution (QCD) from an IRA
If you are at least age 70½ making a gift from your IRA can satisfy not only your charitable goals but also your required minimum distribution for the tax year without any tax consequences. Learn more.
Name the FIU Foundation as Owner and Beneficiary of your Life Insurance Policy
If you wish to receive immediate tax benefits, you may want to make an irrevocable assignment of an insurance policy to FIU. Upon such an assignment, you are allowed an immediate charitable deduction for the lesser of the policy’s fair-market value or the net premiums paid. Subsequent premium payments would also be tax deductible to you. Learn more.
Life-Income Giving
There are a number of ways you can make a current charitable gift, benefit from significant tax savings, and continue to receive annual income based on the value of your gift. The charitable gift annuity is among the oldest, simplest, and most popular of the charitable life-income plans. In exchange for a transfer of cash, marketable securities, or, in some circumstances, real estate, we contractually guarantee to make specified annuity payments to you and/or another beneficiary for life. You can claim a current charitable deduction for the portion of the transfer that represents the charitable gift element. A portion of each income payment is then considered a tax-free return of principal over the donor’s life expectancy. Learn more.